With no pitkala in sight, food agency takes over running of food market

A stand-off between the agriculture ministry and the pitkala – the middlemen who used to buy farmers’ produce to sell it on to retailers – seems to have no end in sight, with farmers now voicing their concern at a stalemate some fear may be a path to the privatisation of the pitkalija.

Since April, the middlemen have refused to turn up at the central vegetable market in protest at a government consultation process to improve the Pitkalija’s operations.

They initially accused the government of wanting to increase the bank guarantee they pay each year as security for the payments due to farmers. They also wanted the government to do away altogether with bank guarantees and to increase their commission from 8% to 15%.

The farmers’ association insisted the guarantees should be kept in place and it found the support of the ministry, which said it would protect the farmers and provide a viable system through which they are paid in time and in full for the produce they sell.

In the absence of the middlemen, six farmers took it upon themselves to set up shop and sell their produce directly themselves. They ended up making more money, having skipped the middleman directly.

The Malta Food Agency, set up earlier this year to deliver public services in relation to food from farming and fisheries, also stepped in to act as intermediary and has been doing so since.

The pitkala tried to stop the ministry from enforcing bank guarantees upon licensees, but their legal action was rejected by the courts. In the meantime, the ministry has launched a consultation exercise in a bid, it says, to provide full traceability of the produce and better safeguards for farmers.

“This is their produce and they should be able to know what is happening with it, who it is being sold to, what it is being sold for and when,” agriculture minister Anton Refalo told MaltaToday.

He confirmed that the pitkala’s annual licenses had expired on 31 March 2021 and that, to be able to resume their operations, they had to apply for a new license and submit a bank guarantee.

Sources told MaltaToday that, in actual fact, it was only six of the 17 middlemen who had to provide a larger bank guarantee this year, and only because they had a larger turnover in 2020 than in 2019. “Because they made more money last year, this year’s guarantee has to increase to reflect that,” the source said. “But it is the amount in relation to the previous year that is higher, not the percentage asked.”

“To date, no request for a new license has been received,” a ministry spokesman said. “Farmers continue to sell their own produce from within the Pitkali market and directly from their holdings.”

To cater for those farmers who do not wish to sell their produce, the ministry decided to sell the produce on their behalf through the Malta Food Agency as of 12 April. “Farmers were given the possibility to deliver their produce to the Agency on the day before the market days, on Sundays and Wednesdays, to facilitate the process,” Refalo said.

Farmers welcomed the swift action taken by ministry after the pitkala decided to stop operating at the Ta’ Qali Market.

“The costs and risks of vegetable and fruit production are very high, and in light of other major challenges such as competition with an imported product, costs are always rising,” said Malcolm Borg from the Għaqda tal-Bdiewa Attivi (active farmers’ association). “Challenges in the resources available to producers means that uncertainties in the payment of products would amount to a significant regression in the position of farmers to continue to grow food for the Maltese population and take care of our rural environment.”

Agency in for long haul

The Food Agency looks to be settling in for the long haul at the Pitkalija. On 30 April, it issued an expression of interest call for sales agents to be integrated within the system. The call, which closes on 7 April, is for the engagement of eight sales and marketing agents on behalf of the agency within an approved marketing centre.

Selected service providers would be responsible to sell and market fruit and vegetables from the marketing centre, making every effort to enhance the sales of the local agricultural produce supplied by the farmers.

Sources close to the ministry told MaltaToday that the proposed reform is a wide-ranging one, aimed at modernising operations and introducing further safeguards for farmers. These proposals include the introduction of a barcoding system to facilitate sales and tracking.

Farmers have always suffered from a lack of secure and sure way to trace their produce. As things stand, nothing stops a middleman from a selling a farmer’s produce for €1 but telling the farmer he sold it for 50c. The farmer has no way to learn, check or confirm what his produce sold for on the market, or where it ends up.

Introducing a traceability system – that could trace produce from the field or farm to the fork, and back – would go a long way to assuaging most of existing concerns.

The sources said that the stakeholders are also mulling the possibility of introducing a fixed price system, whereby the Agency would determine a purchase and selling price for each produce on sales days, and all produce of that type would be sold at the same price at the market. Up to now, each farmer negotiated the price for his produce individually with the pitkala, who were then free to set a selling price.

The proposed system, which would set buy and sell prices after analysing supply and demand, seasonality and quality, has yet to find majority approval among stakeholders.

But some farmers are suspicious that all the changes being introduced and proposed are leading to an imminent privatisation of the Pitkalija, with two major companies – a logistics firm and a food manufacturer – already being mentioned as having been identified to take over the operations at the Pitkalija.

“We do not want to end up working from people who will make a killing off our hard work, while we get barely enough to scrape by,” Anthony, a Burmarrad farmer told MaltaToday. “The ministry says it’s working to protect us and our interests and I hope they know that our interests do not include bringing in big businesses to run things.”